*This conversation was recorded between April and May 2019 on Telegram. Markus Romanos (COO of the project) kindly authorized its disclosure.
Aprendizado Cripto:
Hi Markos, I’m the owner of a Youtube channel related to cryptocurrencies in Brazil (Aprendizado Cripto). I’m studying your project and I would like to ask some questions
Markos Romanos:
Hi there! Yes actually some of our community members have mentioned you in the past and they had told me you might be contacting.
Thanks for reaching out
Sure let me know your questions and I will do my best to reply promptly
I am out of office over the next couple of hours but I will be looking at my phone.
So let me know any question you have and I will take them one by one whenever I find the time
Aprendizado Cripto:
Ok, thank you
My first question is about the tokens PYLNT and PYLNC after the mainnet.
1) Will both tokens coexist? If yes:
2) What will be the practical utility of the token PYLNT? (Dual token platforms like Theta and NEO for example have one token for the security of the network while another token is used for paying fees)
Markos Romanos:
Hi again, see answers below:
1) Yes, the token and the coin will co exist (with Pylnc being released later this year).
2) Both token/coin have their own use and represent different operations around Pylon Network. Starting from PYLNC:
The PYLNC is utilized to pay for services and any transaction fees. At the same time it plays the role of incentive mechanism for supporting Pylon Network and running its nodes (there are two types: light and federated).
So, the consensus mechanism is run on PYLNC (by the “Federated Nodes” – more info is given in the token paper: https://pylon-network.org/wp-content/uploads/2019/02/TokenPaper_PYLON_ENGLISH-1.pdf) and there is a pre-determined amount of PYLNC that will be added in circulation, on every block during the next 16 years, to incentivize adoption and participation/support to the platform (similar to bitcoin’s miners).
PYLNC is based on our low energy demand algorithm (which is based on a Proof of Cooperation consensus), which is designed for the requirements of the energy sector. (On the other hand, PYLNT is an ERC-20 token, based on Ethereum).
The pre-determined amount of PYLNC (let’s call it “mining”), plus any transaction fees associated with each block validation is being distributed among the nodes of Pylon Network (Federated Nodes receive most of it, while a share also goes to the so-called Light Nodes). Within the same incentive (rewarding) system, the PYLNT holders receive PYLNC – it is therefore more accurate to say that PYLNT represents shares of the “mining” operations of Pylon Network and not the company shares in the traditional sense.
Aprendizado Cripto:
Ok, so PYLNC is used for everything on the blockchain. Pylon team will manage 5 full nodes and the rewards received will be distributed between PYLNT holders.
I’m trying to understand now the ICO of 2017. The information paper says 3.250.000 tokens (PYLNT) were sold. But 3.750.000 tokens were premined. So here are my questions:
1) What happened with the 500.000 tokens (difference between 3,75M – 3,25M)? Does it belong to Pylon team?
2) How many tokens does Pylon team have today?
3) The circulation supply of PYLNT is 415.371, total supply is 633.858 (according to coinmarketcap). Are this numbers correct? If not, please tell me the real numbers please.
4) What happened with the difference between 3,25M tokens sold and 415k (or 634k) tokens in circulation. Are they locked?
5) There are any locked tokens today? If yes, what is the schedule?
6) How many money was raised at the ICO?
7) Has the money received been converted to fiat at the ICO? I mean: Pylon project still has ETH/BTC from the ICO or was everything converted to fiat?
I have some questions about the meter as well, but first I would like to address this points. Sorry for the number of questions. I like to know a project in depth before investing and recommending it to my audience
Markos Romanos:
Yes! Correct.
And something that is not clarified in the token paper that has to do with the initial 10M PYLNC that are generated in the genesis block: these will also be distributed with the same distribution as the PYLNC after each block is validated.
No worries, questions are more than welcome.
I am just in the middle of traveling and that’s why my response is a bit slow
I will give you answers by tonight on what you have asked me already (I’m in between flights again..)
Aprendizado Cripto:
Ok, don’t worry, thank you!
Markos Romanos:
Again, apologies for the delay. So, regarding the ICO:
There were 3.25 million tokens offered at the ico and 500k reserved for team/project development. From the 3.25 Million only 133k were sold and all unsold tokens were burnt after the ICO.
The ICO reaised $250k approx. and from this amount the biggest part has been changed to FIAT (only a small portion was remained in crypto for using in exchanges etc.
So, from all tokens, 633k (133+500) stayed in circulation.
So this is the max total supply. (The info in coinmarketcap is correct and there will NOT be new tokens added in the future)
Now from the 500k that were reserved by the team, around 300k have been distributed or used for the development of the project already.
The remaining ~200k are not locked (they have been locked for the first 6 months after the ICO).
Let me know if that is clear and if you have any questions
And also, please let me know any questions you have about the meter (METRON)
Aprendizado Cripto:
Ok, I think I got it…so the team has about 200k (not locked) tokens today and 433k tokens are circulating on the market, is it right?
Do you plan to do a new ICO? Are the team well funded?
I guess the meter’s selling will be a profitable business for Pylon, is it right? In the future, besides meter selling and PYLNTC coins (received as reward) does Pylon has another source of revenue?
Markos Romanos:
Yes, that’s correct
We do not plan to do another ICO. We have started our commercial operations already, so we are scaling up as we scale up our sales.
You are correct about the future revenues with the meter, plus PYLNC. But for the first commercial efforts (short term) we are creating revenues by helping companies access and share data between them and consumers.
(This is essentially the first service which is based on what we call the Neutral Data Hub of Pylon Network – which is based on our blockchain technology)
Aprendizado Cripto:
Nice
Now I have some questions about the ecosystem.
1) In the whitepaper you mention that companies will provide “digital services” to help consumers saving their bill. What kind of digital services?
2) Is the marketplace designed just for “digital services” or for buying and selling energy too?
3) Metron is a meter designed for what kind of consumers? Residential or industrial consumers?
4) Do the generators also have a meter?
5) How will the negociations take place on the marketplace? Will there be long long-term energy contracts? Short-term contracts? (In case of buying and selling of energy)
6) Will the marketplace use only PYLNC? Or will there be any stable coin involved? How do you evaluate the negative impact of a volatile currency?
Markos Romanos:
Hello! Thanks for all your questions – I will post the answers below and always feel free to ask more!
1) In the whitepaper you mention that companies will provide “digital services” to help consumers saving their bill. What kind of digital services?
2) Is the marketplace designed just for “digital services” or for buying and selling energy too?
Common answer for both questions:
–> Digital services include anything from a house energy audit (an energy consultant who wants to help a consumer reduce their energy consumption/bills), to investments in energy communities projects, to automated comparisons of the cheapest electricity that is available in the market (let’s say “a skyscanner of electricity suppliers”), to the more advanced ones like local/peer-to-peer energy trading and virtual demand response. (So the short answers is that selling energy can be one of the services).
Note that this ecosystem is open, meaning that there are third party service providers, who can develop and offer their own tools and integrate them with the Neutral Data Hub. This means that the services could even extend to applications which are purely related to the interaction with the Neutral Data Hub (for example a tool that can help anonym-ize consumers data, which can be needed in specific data transactions).
3) Metron is a meter designed for what kind of consumers? Residential or industrial consumers?
–> Metron was initially designed for the purposes of our pilot with GoiEner – and was a submeter for residential consumers (submeter = it is installed in parallel with the “official” utility meter, which cannot be replaced and we could not access at that time). However, during the demo stage we carried out 3 integration with existing (manufactured) submeters: Smappee, Mirubee and eGEO (you can find posts about each one in our blog). With these integrations we can cover both type of consumers (res & ind), as well as producers (again, res & ind).
However – as I had also mentioned in a previous answer – we can now access the data from utility meters, too, which take out the additional cost for the customers and are good for most applications (or digital services). So, this means that Metron is addressed to applications (services) which require high quality/frequency/granularity of data (e.g. for peer-to-peer trading the requirements cannot be covered by the utility meters that are installed in EU, so a Metron would be required in that case)
4) Do the generators also have a meter?
–> Yes – see 3) above. And for existing generators that already have a meter installed, we can integrate it, without the need to buy an additional METRON (as we do with the consumers too).
5) How will the negociations take place on the marketplace? Will there be long long-term energy contracts? Short-term contracts? (In case of buying and selling of energy)
–> This will basically depend on “what the market will want” (there will be different services that will be competing for attracting more customers and winning their preference. So the consumers of the ecosystem will choose the one that best suits their needs and expectations). But of course it will also depend on whatever is allowed within the regulations of each energy market (and this varies a lot, even within the EU).
6) Will the marketplace use only PYLNC? Or will there be any stable coin involved? How do you evaluate the negative impact of a volatile currency?
—> In short, the marketplace will not impose PYLNC as the only payment method. It will be offered as an option for all services offered in Pylon Network but not imposed (anyone who wants will be able to pay with FIAT currencies).
We decided to do that because we early realized that the majority of people are not ready to utilize crypto currencies for their energy and it was clear that imposing it would undermine greatly the adoption potential of the project. And of course, as you said it is not smart to expose your energy (something so essential) on this volatility.
However, we will still put forward several strategies to incentivize the utilization and the use case for PYLNC to create an internal reflection of value (and utility of) the Netural Data Hub and the services of the ecosystem.
Aprendizado Cripto:
Thank you for the answers
What are the advantages of using PYLNC rather than FIAT currencies?
Markos Romanos:
The main advantage that we have already identified is the ability for micro-payments with minimal transaction fees, which makes it very suitable for pay-as-you-go or save-as-you-go payments in use cases where multiple actors are involved. (We have validated that this is a valuable tool for many applications that are evolving in the energy sector – especially among energy communities that wish to create sharing economy models around their energy production and consumption.)
Furthermore, or anything that has to do with Pylon Network (services that are offered by us within the ecosystem, or anything that has to do with the operation of the Neutral Data Hub) we will be incentivizing the use of PYLNC by offering discounts when paying with it – reflecting the lower costs of transactions and passing it to the users of the ecosystem. (and as I mentioned before anyone is also able to do that, if they wish).
These are the main two advantages offered that we have identified, however, we are constantly looking for more applications and added value.
At the moment we are working with the energy communities on several fronts and exploring a number of such schemes, which will give us more insights on the matter and surely will open our eyes further 🙂
(And by the way, this is a very good time for communities in Spain, due to a recent regulation change which gives many advantages to energy communities and their role in the energy transitiion – see here: https://www.forbes.com/sites/anagarciavaldivia/2019/04/15/renewable-energy-in-spain-from-the-sun-tax-to-the-promotion-of-collective-self-consumption/#1c8b7e2eaeeb)
Aprendizado Cripto:
Nice
Fees in blockchain are not always cheap, it depends on the architecture of the network. Bitcoin and Ethereum are struggling to improve this issue. IOTA, for example, targeting the niche of micropayments between machines, decided to use Tangle as a solution for small fees. How do you solve this problem? Is your architecture very different from Ethereum? Do you have sidechains, second layer (or something to deal with scalability/fees issue)?
Markos Romanos:
First of all, just a clarification: when I say micro-payments – in the energy sector context – I mean at most hourly (probably daily) settlements of electricity (pre)payments. I clarify this, because even though the amounts in monetary terms, can be small, the occurrence (cycle) of the payments is not as intense as typically seen/implied and are also predefined/predictable.
But nonetheless, you are 100% right about the scalability.
There are some aspects of Pylon Network that offer advantages and differentiate from Ethereum and Bitcoin; the permissioned architecture of PYLNC (Federated Nodes), eliminate many of the scalability challenges and offer us full flexibility to shape multi-level architectures. This flexibility will also be required for adopting to different markets and regulations which differ from market to market and is something we will be developing as we implement the use cases we have been exploring, in the real market.
For now, we have just decided to avoid the smart contracts of Ethereum, since they add complexity/slow down to the code, and we also do not need for the application we have designed it (Neutral Data Hub). But as you said, things are evolving so fast and there are some very strong communities out there that are trying to tackle the scalability challenge. And we keep our eyes and mind open to what other solutions are out there – and if something better comes out (which might be around the corner), why not use it?
Aprendizado Cripto:
Thank you for the explanations. I would like to ask you just a few more questions if you’ll allow me:
1) You mentioned that some strong projects are trying to tackle scalability. What projects have you been following in this regard?
2) When you say permissioned blockchain you are talking about the federated nodes (full nodes), isn’t it? In this case, I guess all full nodes needs to be validated by the Pylon team before starting operating. Is it correct?
3) Will the architecture be always centralized? Or do you plan to remove the centralizing agent in the future?
4) I guess your relationship with Faircoin is related to the implementation of the PoC protocol. Is there something else between this two projects (Pylon and Faircoin)?
5) Are you working to be listed on some large exchange after the mainnet release? Or do you think it’s very difficult and probably will not happen anytime soon?
6) Is it possible to invest in Klenergy? I guess this is the company that will profit from the sales of the meters. If I understand correctly, this profit will not be distributed to the PYLNT holders.
7) Are you waiting for any regulation approval? I mean something you need before starting the mainnet operation.
8) Is there any regulatory risk that can stuck Pylon operation? I would like to see your perceptions on that, how are you dealing with it.
9) Do you plan to operate just in Spain? Europe? Other countries?
10) You mentioned some partners in your website. What are the most important ones and what are they doing to help Pylon?
11) Do you know how many participants Pylon will have in the mainnet launch? I mean everyone (the whitepaper mentions 5 federated nodes beside Pylon, but how many people/companies will be using Metron at this time)?
12) Will Pylon marketplace be segmented by country? I mean, in Brazil a regular consumer can’t buy energy from a generator that are in another country. Some industrial players can do it. I don’t know how it work in Europe.
Markos Romanos:
Hi Aprenizado, thanks for the questions and the extensive research. It shows you are an engineer! We are awesome :DDDD
Please find answers below (sorry for the delay again):
1) You mentioned that some strong projects are trying to tackle scalability. What projects have you been following in this regard?
Well, besides the scalability solutions that are developed by the Bitcoin community (i.e Lightning Network) – which would be compatible with our algorithm and architecture – we are also following Radix DLT project which seems like they are very focused on that and looks promising. We are
2) When you say permissioned blockchain you are talking about the federated nodes (full nodes), isn’t it? In this case, I guess all full nodes needs to be validated by the Pylon team before starting operating. Is it correct?
Yes, I am referring to the Federated Nodes. Any new node, will be validated by the existing nodes (1 node = 1 vote) by majority (50% + 1). But of course, Pylon team will have a big say in that, since – at least at the beginning – it will have a considerable amount of nodes. As the number of federated nodes increases, Pylon Network Nodes will have less and less saying on who becomes a federated node.
3) Will the architecture be always centralized? Or do you plan to remove the centralizing agent in the future?
This is something we have discussed about and examined thoroughly in the past. Due to many reasons (including the alignment with GDPR regulations of the EU) we do not plan to remove the central entities (aka. Federated Nodes). Furthermore, the energy sector is heavily regulated and we know as a fact that a fully decentralized architecture would increase the challenges faced for real implementation.
4) I guess your relationship with Faircoin is related to the implementation of the PoC protocol. Is there something else between this two projects (Pylon and Faircoin)?
Yes that’s right (about the PoC). Besides the technical development cooperation and exchange of ideas for aspects of the algorithm, there is no other relationship between the two projects.
5) Are you working to be listed on some large exchange after the mainnet release? Or do you think it’s very difficult and probably will not happen anytime soon?
Due to the sometimes outrageous listing costs of centralized large exchanges, we are not very keen (nor able) to make this move anytime soon. However, we will be taking steps on getting listed on DEX exchanges with large volumes (and this might even be done before the mainnet launch)
6) Is it possible to invest in Klenergy? I guess this is the company that will profit from the sales of the meters. If I understand correctly, this profit will not be distributed to the PYLNT holders.
Yes this is correct. Although if the meter is used for becoming a light node (aka. for being installed in production installations), it is highly possible that a part of the revenue will be staked in form of PYLNT. However, for the time being, there is no such decision made.
So, regarding the investment in Klenergy, this can be done via traditional capital raising paths (and not through pylnt).
7) Are you waiting for any regulation approval? I mean something you need before starting the mainnet operation.
No – we are in full accordance with existing regulations (at least in EU level, which is the market we are addressing at the moment and in the short-/medium-term (i.e. next 3-5 years)).
8) Is there any regulatory risk that can stuck Pylon operation? I would like to see your perceptions on that, how are you dealing with it.
As I have explained in the past, Pylon Network is designed to play the role of a neutral data hub for the energy sector. This means that it is designed with a consumer-centered approach and with privacy ensured by-design. Both of these characteristics make it ideal for (and in full accordance with) European regulations for data privacy (“GDPR”) and for the unification of energy markets in Europe (“The Energy Union”).
9) Do you plan to operate just in Spain? Europe? Other countries?
Even though we start our operation in Spain, we are planning our expansion strategy to other EU countries (UK, Italy and France being the most attractive at the moment). Due to the unification and homogenization of the European energy markets, EU is the “obvious” strategy and this is where we focus for the time being. But of course, we have our eyes open for other global markets that can be attractive for the next stage of expansion and have already established some kind of network (e.g. California).
10) You mentioned some partners in your website. What are the most important ones and what are they doing to help Pylon?
Besides the partners, who are related to the blockchain development and infrastructure (Faircoop, Entropy Factory, ChipChap), the most important partners at this stage are related to energy stakeholders who are either helping in the implementation of Pylon Network in the energy sector or by raising awareness about the project in the energy sector. These are mostly energy cooperatives (GoiEner, La Corriente, Ecoo, Union Renovables) and energy citizen groups (Energy Cities) – mostly in Spain but also in EU. However, note that these are not 100% updated and when in position to do so, we will reflect additional players that are helping us with the next steps (i.e. commercialization)
11) Do you know how many participants Pylon will have in the mainnet launch? I mean everyone (the whitepaper mentions 5 federated nodes beside Pylon, but how many people/companies will be using Metron at this time)?
Yes, the first Federated nodes (besides Pylon Nodes) will be energy cooperatives – which will officially be announced in the near future.
12) Will Pylon marketplace be segmented by country? I mean, in Brazil a regular consumer can’t buy energy from a generator that are in another country. Some industrial players can do it (I’ve worked at Petrobras in the energy contract sector as an engineer, my gratuation is electrical engineering, so I have a little knowledge about these issues). I don’t know how it work in Europe.
By default yes – it will be segmented by country due to the reasons you say but also other specificities/details that might vary from country to country. However, this does not mean that they will operate as silos (i.e. there will be the ability to exchange information if the application requires it).
Aprendizado Cripto:
Thank you Markos!
Markos Romanos:
No prob – thank you! Let me know whatever additional questions you might have 🙂
Aprendizado Cripto:
What is your strategy to promote Metron and Pylon network for regular consumers? For example: paid ads, reward incentives (like comissions for getting more people into the system), and so on…I would like to know how are you planning to reach these people (small consumers)
Markos Romanos:
Our strategy lies on growth-hacking our way to final consumers in Spain (to start with) by offering them easy and automated services to save money. Part of our strategy is launching a national campaign in Spain to acquire a critical user mass, which will consist our early adopters and the first users of our services which will help them save money and offer us valuable feedback on the improvement of the services. This will rely on incentives like discounts, as well as referal rewards. But this is what we are working atm (in parallel with out B2B commercialization efforts) and we are planning to provide more info after June
Aprendizado Cripto:
I saw your submission video to LEDGER_EU. If Pylon gets this support, what would the main destination of the funding be for? In other words, what are your main challenges today where money could help?
Markos Romanos:
Mainly:
1 – INNOVATION: Explore the expansion applications of Pylon Network with a focus on Energy Communities (as I mentioned, the regulation changed recently in Spain and all EU members are going to follow, by voting their own national regulation on communities).
2 – BOOST COMMERCIALIZATION/ADOPTION EFFORTS: Hire additional team for reaching out to more energy stakeholders in Spain.
3 – STRATEGIC PARTNERSHIPS: Establish more strategic partnerships and channels to the EU markets we are considering for expansion (we are looking at 2 EU markets at the moments, with potential of replicability of what we are doing in Spain.
Aprendizado Cripto:
Hi Markos, the Power Ledger (POWR) project is similar to Pylon. Are you competitors?
I’m preparing a video to publish in my channel about Pylon. It would be nice if I can post this conversation we had here in the video description or in the comment section…
Please let me know if it’s ok to you
A lot of questions were clarified
Markos Romanos:
Great to hear! Sure – no problem with sharing the answers, please go ahead.
And about Power Ledger, we do not see ourselves as direct competitors, even though they are also developing something similar (in regards to the energy marketplace approach).
However, due to the fact that they are operating in Australia and SE Asia and that they work in a more closed environment (from what I’ve understood) we see them more as potential collaborators (integrating our platforms and Pylon Network playing the role of the neutral data hub) than competitors (competing for the same market/applications). And just to clarify, I’m talking purely hypothetically about the collaboration.
The implementation road is long and the use cases that are being explored are numerous, so there is a lot of blue ocean to be discovered. (So in general – I think – the term “competition” in blockchain/energy space atm does not have the same meaning as in the traditional markets.)
Aprendizado Cripto:
Ok, thank you for the answers!